Doorstop Interview
Canberra
23 October 2009
SUBJECTS: Treasurer's meeting; housing supply; States clawing back pension increase; stimulus spending on infrastructure; Malcolm Turnbull's leadership
TREASURER:
We had a very useful meeting with State Treasurers this morning. We had a very good discussion about our investments in Nation Building infrastructure and, in particular, the investment in the school modernisation program, and social housing, the importance of that stimulus infrastructure investment, to supporting jobs and to supporting small businesses right across Australia. And I think all Ministers agreed that this was very important, very timely and certainly is required as we move forward. So that was a very good discussion.
We also had a broader discussion about the economy. I gave them a detailed briefing on the economy, where we've been, outlook for the future.
And we also had a very long discussion about housing supply issues, because I think most people are aware that, in terms of our population growth we're simply not building enough houses and we've got to do more in terms of the supply of housing in our community as we move forward through to economic recovery and into the future. And to that end Minister Plibersek came along as well – the Housing Minister – and we had a good discussion about all of those issues.
In addition to that we agreed to further progress a national uniform system of trade licensing. This is very important so that tradies can move from State to State. The States agreed to fund that system and we agreed to set up a special advisory committee to further increase that important work. This is very important for labour mobility in our community, and it is also part of making sure we put in place that seamless national economy that's so important as we go forward. So that's a bit of a summary of the things we discussed this morning. I'm happy to answer any of your questions.
JOURNALIST:
What conclusions did you reach on the housing crisis? And how are you going to increase supply?
TREASURER:
Well, we had a long discussion about what must be done and agreed that we would progress these issues through our Housing Ministers. We, of course, did review the progress that we've made through our very substantial investment in social housing through economic stimulus. That's been important and that investment is on track. Our Housing Minister took the opportunity to talk to the State Treasurers about the importance of our National Rental Affordability Scheme, what might be done to get more private sector investment involved there with both state and Commonwealth investment - that's been very important. There was a discussion about various models - and it proved effective - around Australia in terms of social housing. There was also a discussion about the availability, or unavailability of finance for some forms of multi-unit dwelling. A discussion about where we might go and what more could be done in terms of development approvals. All of these things go to the core of housing supply. I think it's pretty important, and the Commonwealth has this view that we've got to get ahead of the curve here. We have not been building enough houses, we do have strong population growth. So it will be very important as we move through to economic recovery to ensure that we don't have capacity constraints that flow from a shortage of houses. And, indeed that's why we put significant resources into social housing as part of our stimulus plan - not just to create jobs for now, not just to support small business for now, but also to leave a lasting legacy of more affordable housing, which is absolutely essential to our economic prosperity into the future.
JOURNALIST:
Can you give a firm commitment that, that social housing program will not be cut again?
TREASURER:
The social housing program is part of the core stimulus that we've put in place. And as you are aware, and we had a discussion about this this morning, the stimulus peaked in June. The cash payments were still in the system but are starting to fade out and, of course, some of the other measures that we've put in are starting to fade out and as we go through next year the stimulus is gradually withdrawn and it detracts from growth. But an essential part of that stimulus as we move forward is that substantial investment in social housing, is that substantial investment when it comes to our school modernisation program. And both those programs are providing essential support to the construction sector which has been very badly hit by a downturn more broadly, particularly in commercial property.
JOURNALIST:
Did you press the states in terms of the pension increase and what they might be clawing back by rental increases for pensioners?
TREASURER:
Look we had a pretty robust discussion about this issue. I feel very strongly about this issue. This pension increase has been hard earned and hard won by Australian pensioners and there is simply no way the Commonwealth will tolerate a clawback of that one-off pension increase by the states, for pensioners in public housing. Now some states agreed with the Commonwealth position and some states did not. But discussions will continue.
JOURNALIST:
Which ones don't?
TREASURER:
Well, I'll leave that up to the states - to self identify.
JOURNALIST:
Are you disappointed that you weren't able to get a uniform agreement on that today?
TREASURER:
Well, as you know there is already an agreement that the current arrangements will stay in place for 12 months. So there's not an urgency in terms of anything that is happening right now. But I made it very clear, absolutely crystal clear that the Commonwealth will not tolerate any claw back of that base rate pension increase by states for pensioners in public housing. Very clear.
JOURNALIST:
You're asking really for a separate set of rules for pensioners than other people in public housing.
TREASURER:
No I'm not. I've been familiar with this issue for a very long period of time and the fact is that there have been indexation arrangements in place for pensioners and others in public housing for a long period of time. What some states are proposing is to take a far bigger share of that base rate increase than normal indexation and the Commonwealth will not tolerate that.
JOURNALIST:
What will you do about it?
TREASURER:
Well, we'll cross that bridge when we come to it. As I said, we've got some time to sort it out. Some states in the room this morning, supported a Commonwealth position and I thank them for that, and some states did not.
JOURNALIST:
Mr Swan did you discuss how the states are spending their stimulus money on infrastructure projects?
TREASURER:
Yes we did. We had a lengthy discussion about the importance of our stimulus infrastructure investment. As you know, some 70 per cent of our stimulus is invested in infrastructure, in shovel ready projects which are going on around the country – tens of thousands of projects in schools, in social housing. These are very important. It's a pipeline of work that has given the business community in this country confidence. And when you look at the sort of data we are getting on the economy you can see how important this stimulus is to future economic growth and to confidence more broadly in our economy.
JOURNALIST:
But is there concern that the states aren't choosing the right projects?
TREASURER:
I think that when it comes to both social housing and the school modernisation program the stimulus has been implemented, and has implemented within the guidelines that we have outlined, and it is largely meeting the timeframes that we've set as well. And that's a good thing because that's why we are getting some of the economic results that we're getting now, because the Government put in place a timely stimulus, put in place a targeted stimulus. The consequence of that is that growth is much stronger than it would have otherwise been. I remind you that in the year through to June growth would have been negative by -1.3 per cent if it wasn't for our economic stimulus. It was positive by 0.6 per cent in that year because of our economic stimulus. And it remains important to recovery as we move through the rest of this year and through next year.
JOURNALIST:
On asylum seekers, more Liberals have supported Wilson Tuckey's views. Do you think this is now becoming a question of Malcolm Turnbull's leadership? Is it weakening his leadership?
TREASURER:
There's no doubt that Malcolm Turnbull is a weak leader, and you've seen it on display in a whole range of issues – climate change, economic policy – you name it.
